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All That Online Shopping You’re Doing? It’s Also Bringing Jobs to Inland California

Distribution centers are becoming more automated, but increased demand from consumers is still creating more jobs. (Erasmo Martinez/KQED)

By Erika Kelly and Lisa Pickoff-White –

The unemployment rate in Santa Clara County — the heart of Silicon Valley — is 3.8 percent. The rate is even lower in other tech-focused cities in the region, such as Cupertino, Palo Alto and Menlo Park.

The tech sector is driving those jobs, from Apple to Google to Facebook.

One of the biggest areas of growth continues to be within e-commerce. E-commerce jobs have existed in Silicon Valley since the dawn of the first dot-com era, way back in the late 1990s. Remember, if you will, Pets.com.

But the Silicon Valley e-commerce jobs aren’t stockers and shippers and blue-collar jobs — the office parks for e-commerce companies in Silicon Valley are filled with software engineers, web developers and marketers.

But as e-commerce, or online shopping, has grown, it has fueled another type of job: Jobs in warehouses and distribution centers, where the stuff we order gets sorted, packed and shipped.

One measure of this growth is in jobs labeled as “general warehousing” by the federal Bureau of Labor Statistics.

In California, those jobs jumped dramatically from 57,047 in 2007 to 90,263 in 2016. The growth has been concentrated in places like the Inland Empire, which helps fill demand from customers in and around Los Angeles. In Riverside County, for instance, warehouse jobs quadrupled from 4,944 to 20,567 between 2007 and 2016.

According to economist Michael Mandel with the Progressive Policy Institute, online shopping has the potential to bring employment to areas far beyond Silicon Valley, including areas like Riverside County, which are in need of jobs and growth.

“These are jobs that are fairly well paid. They are not entry-level retail jobs,” said Mandel. “They’ve got decent salaries and very often are full benefits. So this really makes a difference to the growth of a region like this, helping pull jobs out of the concentrated center cities, those really dense areas, to areas that really need it.”

Mandel said the growth in the number of warehouse-related jobs has more than offset the stagnation of jobs in the world of brick-and-mortar retail. Mandel acknowledged that the jobs are quite different, and in some cases more difficult.

In San Joaquin County, where Tracy is located, warehouse jobs increased from 4,338 in 2007 to 11,691 in 2016, according to the Bureau of Labor Statistics. Meanwhile, housing costs in Tracy have skyrocketed, and warehouse wages haven’t been able to keep up.

As companies like Amazon push the boundaries of automation in their distribution centers, there is a fear that these jobs could be short-lived. A recent study from McKinseyranked different job sectors where machines are most likely to replace humans, and “Transportation and Warehousing” ranked near the top. That’s because jobs with lots of repetitive tasks, like those often done in warehouses, are most at risk from automation.

For now, however, there are some jobs that people do better than robots — things like picking delicate or oddly-shaped items from a shelf. In many cases, people and machines are working side by side. And it appears that ever-growing demand for online shopping is only creating more jobs.

The map below shows data from the Bureau of Labor Statistics for general warehouse jobs in 2016. Counties in a darker shade of red had more jobs. The average county had 3,600 general warehouse jobs in 2016.

About steve@bayintegratedmarketing.com

Steve Ulrich is a principal at Bay Integrated Marketing: www.bayintegratedmarketing.com.
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